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Europe Pleads With US
To Bolster Dollar
By Ashley Seager
The Guardian - UK
11-17-4

European leaders yesterday appealed to the United States
to rein in its gaping current account and budget deficits and prevent the
dollar falling further against the euro - but there was little sign the
US was listening.

The dollar was hovering close to a record low against
the euro of $1.30 yesterday while the pound, caught between the euro and
dollar, hit an 11-month low against the euro of just over 70 pence.

"Everyone is worried when they think about the euro/dollar
rate and what effect this has on exports and not just on exports,"
the German chancellor, Gerhard Schrder, said.

At a regular meeting in Brussels, eurozone finance ministers
expressed growing concern that the euro was bearing the brunt of the dollar's
fall rather than the Chinese currency, which is artificially pegged to
the dollar. Growth in France and Germany, the bloc's two biggest economies,
slumped to just 0.1% in the third quarter, according to figures out last
week.

"We need a good dialogue with the US," said
Belgian finance minister Didier Reynders. "In G7 [Group of Seven industrial
nations] it is important to repeat that all regions of the world economy
need to get to a balanced situation."

There was no talk of intervention by European countries
to buy dollars and try to prevent the US currency falling any further,
however.

Luxembourg's prime minister, Jean-Claude Juncker, said
he thought the US had an "under-developed sense of hearing" regarding
the dollar's fall, which European Central Bank governor Jean-Claude Trichet
has called "brutal".

US treasury secretary John Snow said during a visit to
London that the Bush administration was well aware of the deficit problem.
"We know that our deficit is too large. That is unwelcome. It needs
to come down - and the president is committed to bringing it down,"
he told the BBC.

But he also rejected suggestions that spending on the
war in Iraq and the wider "war on terror" would have to be reined
in. "Freedom is priceless. We will pay whatever price is required,"
he said. "The war in Iraq is not something that will require year
after year funding - as for the war on terror, we will never let our guard
down."

Mr Snow regularly repeats the mantra that the US wants
to see a strong dollar but adds that markets should set exchange rates
- a sign markets have taken that the US is not hugely worried by the greenback's
fall.